Organic Broadcaster

Organic community debates check-off program

By Audrey Alwell, MOSES

The 2014 Farm Bill has opened the door for the creation of an Organic Research and Pro­motion Program, a.k.a. an organic check-off. This check-off would create a pool of money to fund research as well as collective promotion of organic products—think “Organic: It’s what’s for dinner” or “Got Organic?”

For years, the organic community has been debating the merits and faults of an organic check-off. Both sides of the issue were explored in the Organic Broadcaster in January 2013 when Ed Maltby, Executive Director of the Northeast Organic Dairy Producers Alliance (NODPA), explained farmers’ concerns about an industry-wide program, and Melissa Hughes, General Counsel for Organic Valley, wrote about the need for uniform messaging on the benefits of organic. (Both articles are on the MOSES’ website.)

In her piece, Hughes referred to “technical fixes” that needed to happen before an organic check-off program could be created. The 2014 Farm Bill addressed those, clarifying that certified organic producers can choose to be exempt from non-organic commodity research and promotion programs. The Farm Bill also identified the organic sector as one commod­ity—another “fix” that needed to happen before the USDA could consider an organic check-off. Federal research and promotion programs by law have been tied to a specific commodity such as beef, eggs, dairy, cotton, or soybeans. Since the organic sector encom­passes many of those commodities, the law needed to be amended to recognize the organic sector itself as a commodity. The end result is that the USDA’s Agricultural Mar­keting Service (AMS) now is authorized to accept an application from the organic com­munity for a research and promotion program for organic products.

AMS is the agency that oversees check-off programs. It currently oversees 22 industry-funded research and promotion programs that “allow farmers and businesses to pool resources, set common goals, and make collective decisions about how to best develop new markets, strengthen current markets, and conduct important research and promotion activities,” explained Sam Jones-Ellard, AMS Public Affairs Specialist. He pointed out that AMS oversight ensures that the boards operate with “fairness, transparency and in compliance with the law,” adding that the agency is not involved in the development or selection of projects promoted by the check-off programs. Those decisions are made by each check-off program’s board, which is appointed by the Secretary of Agriculture—a fact that has raised concerns in the organic community.

“Having served on the NOSB, I am very uncomfortable with the creation of a new government-appointed board to oversee how check-off dollars would be spent,” said organic farmer Jim Riddle, who co-owns Blue Fruit Farm in Minnesota. “Such boards become very political, and they quickly lose touch with the needs of producers.” NODPA’s Maltby shares Riddle’s concerns.

“Quite simply, farmers and ranchers have a visceral dislike for USDA check-off programs that have a history of bad management,” Maltby wrote recently on NODPA’s O-Dairy comment board.

Bad management is one reason journalist Alan Guebert isn’t a fan of check-offs. In his keynote speech at the 2014 MOSES Organic Farming Conference he cautioned farmers, “If you’re going to do a check-off – do it right. Study the ones that are out there and don’t do that!” He restated his concerns about check-off programs in his July 10 Farm and Food File column, noting that there is “little independent evidence to suggest any of billions spent on check-offs in the last 25 years has had any material impact on prices received by farmers and ranchers.” When responding to a question for this story, Guebert added, “Check-off programs have been good for Big Ag; your average farmer not so much.” See the entire keynote presentation.

NODPA’s website includes a page explaining its concerns about an organic check-off program (www.nodpa.com/checkoff_opposition.shtml). NODPA is one of the organizations that created a joint letter a year ago to oppose an organic check-off program. The letter, which can be accessed from the NODPA check-off page, cites AMS statistics showing declining sales of beef, eggs and milk despite widely recognized campaigns to increase consumption of those products. NODPA and other organizations that represent organic farmers and ranchers have created an online petition against a federally mandated organic check-off program. The petition is here.

A frequently mentioned concern with a federal check-off is that the rules don’t allow organic to differentiate itself by making comparisons to farming which uses genetic engineering and high levels of pesticides. The guidelines for federal research and promotion programs state that advertising claims cannot disparage another commodity. But, others say that rule doesn’t hamper creative promotions.

“Many of the existing promotion programs seem to have advertisements with ultra-simple, short messages that are effective,” said Catherine Greene, Senior Economist for the USDA’s Economic Research Service. The “Incredible, edible egg,” “Cotton: the fabric of our lives” and other campaigns educate consumers about the merits of those products without comparing them to other commodities.

“Various studies have shown that commodity promotion programs are a cost-effective way to expand consumer demand,” Greene added. “A commodity promotion program is also potentially a way to educate consumers about the distinctions between regulated ‘USDA organic’ products and products with unregulated eco-labels that are often confused with organic.”

Clearing up consumer confusion about “organic,” “natural” and “GMO-free” labeling is one of the main reasons the Organic Trade Association (OTA) supports an organic check-off program.

“There is much confusion among consumers about what organic really stands for,” said Laura Batcha, OTA CEO and Executive Director. “A concerted campaign to get the message of organic out to the public would help consumers connect the dots about all the benefits of organic.”

The OTA website outlines its view on the need for an organic research and promotion program, answers frequently asked questions, and points to www.unitedformoreorganic.org, a website that promotes an organic check-off as a collective way to fund both research and promotions.

Batcha said OTA has been reaching out to organic producers and handlers through town hall meetings, mailings, and phone calls in order to give the entire sector the chance to weigh in on the potential check-off program. Comments from those town hall meetings also are posted on the OTA website.

“We are hearing that many certificate holders are interested in the benefits of a check-off and are looking for more information about what it means,” Batcha said. “When they learn the details, most support the idea of a check-off, and think it would provide significant benefits to the organic sector.”

Funding a Check-Off

One factor that isn’t sitting well with farmers, though, is how a check-off would be funded. OTA recommends assessments that are “broad and shallow. The vision is that if everyone pays a little, then everyone gets a big benefit.” That means every certificate holder along the supply chain—producers, handlers, brand manufacturers, co-packers, and importers—with gross annual sales in excess of $250,001 would pay into the check-off. The assessment would be based on one-tenth of 1 percent of net organic sales over $250,000.

Organic farmers like Riddle think mandatory across-the-sector funding of an organic check-off will discourage farmers from getting certified or making the switch to organic production. “Imposing a tax, additional to certification costs, on organic producers will add one more barrier to the adoption of organic methods,” Riddle said. “Clearly, we need much more money for organic research, but taxing organic producers and processors is not the best way to raise those funds.”

Rather than a check-off program, Riddle recommends that the government focus on a “full-blown organic transition strategy, with incentive payments and technical assistance to facilitate the shift from conventional to organic systems,” he explained. “Such programs have been implemented successfully throughout Europe, where the percentage and number of organic farmers are much higher than in the U.S.” Riddle outlined other alternatives to an industry-wide organic check-off when he posted on the O-Dairy comment board in July. His suggestions include funding a check-off through consumers at the retail end, and a voluntary check-off system, not controlled by USDA.

On that same comment board, Chuck Benbrook of Washington State University’s Center for Sustaining Agriculture and Natural Resources, wrote, “I have always hoped that a model could be developed to collect the check-off funds further along the value chain, since the healthiest and most consistent profit margins are in the food companies and retail. Plus, those are the business entities that stand to benefit most directly if check-off-funded research and promotion builds organic demand, as it surely should.”

Greene of the USDA-ERS pointed out that not all commodity check-offs are funded by everyone involved in production, distribution and retails sales. “Some aren’t financed by all producers or by any producers,” she explained, adding that the check-off for raspberries is funded by producers of raspberries for processing and importers, the honey program by packers and importers, and the softwood lumber and paper programs by domestic manufacturers and importers.

Collective Approach

In reading through all the websites, petitions, and comments about an organic check-off, it’s clear that many people see a need for some kind of collective fund to encourage organic research and promote organic as a healthy choice for consumers and the environment. “The industry-wide organic check-off system is a crucial development for the organic movement,” said David Bronner, President of Dr. Bronner’s Magic Soaps. “We are at a crossroads with the industrial agricultural machine on the one hand and sustainable, organic agriculture on the other. From mitigating climate change to eliminating dangerous polluting pesticides, we have answers to pressing problems that need to be more widely understood and embraced.”

“Dollars raised by a successful check-off would increase research for farmers wanting to transition to organic and help boost organic acreage and organic production in this country,” OTA’s Batcha added. “An organic research and promotion program would push forward the entire organic industry. Ultimately, it’s up to organic certificate holders to decide whether a check-off program is the right path to help secure the sector’s future.”

Approval Process

The process continues to be a long road. Before the USDA will consider a proposal, stakeholders need to show “substantial” industry support. If that support exists, then representatives of the industry can submit a proposal to the USDA, showing justification for a check-off, its objectives, and the impact on small business. If the USDA approves the proposal, it will publish it in the Federal Register for public comment. It might also hold public meetings. Once the comment period closes, the USDA must decide if the program has merit and meets legislative intent. If that hurdle is cleared, the USDA will issue a referendum to allow the industry to vote on the proposal. If that referendum passes (the proposal would specify the majority needed), then the USDA will seek nominations for board members, and the organic check-off program can begin to be implemented.

The check-off proposal has yet to be written. Stakeholders are still seeking opinions about possible options.

“Nothing is cast in stone at this point—we do not know what the check-off may look like,” said Harriet Behar, MOSES Organic Specialist and policy expert. “Some ideas have been floated that might make it more palatable to farmers. These include having the funds overseen by regional boards, similar to SARE, so the funds could be directed more specifically to the needs of the producers and handlers in that region.”

It also hasn’t been decided how much funding would go to research and how much to promotion. These decisions need to be made before submitting a proposal to the USDA—if the community decides that’s the best place to “house” a collective fund for organic research and promotion.

“We have not had enough time to think creatively on how to build a program that would work for us, either within the USDA or outside of it,” Behar added. “I am hoping that perhaps a better idea could be stimulated—that’s what Alan (Guebert) challenged us to do at the MOSES Conference.”

The Organic Trade Association has created a survey with options for a framework based on initial feedback from certified organic operators. The survey online, provides a way to examine proposed options and put forth new ones. It is also available in print from OTA by calling 202-403-8512.

Audrey Alwell is the Communications Director for MOSES and the Managing Editor of the Organic Broadcaster.